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Hans Hoogervorst, chairman of the International Organization of Securities Commissions' technical committee, said trading over-the-counter derivatives through a centralized market would increase transparency, competition and supervision of the market. "IOSCO believes that it is appropriate to trade standardized derivatives contracts with a suitable degree of liquidity on organized platforms, provided that a flexible approach encompassing a range of entities that would qualify as such platforms is taken by regulators," Hoogervorst said.

Related Summaries

The International Organization of Securities Commissions said securities regulators should require the after-trade dissemination of credit default swaps data. IOSCO said a survey of 23 participants in 10 jurisdictions showed that making the information available to traders provides a net benefit to the CDS market. "IOSCO believes that greater post-trade transparency in the CDS market -- including making the price and volume of individual transactions publicly available -- would be valuable to market participants and other market observers," the group said.

Regulators still have work to do on assessing the effects of margin requirements for non-centrally cleared derivatives, but an interim consultation will be published soon, says David Wright, secretary general of the International Organization of Securities Commissions. "We haven't sorted out yet the margin requirements for over-the-counter derivatives that are not cleared," Wright said. "You can expect in a few days that IOSCO and the banking regulators will come out with what is described as a near-final consultation, which will open up for further comment three or four issues." Read ISDA's letter to the Basel Committee on Banking Supervision and IOSCO about its proposal on margin requirements for non-centrally cleared derivatives.

Martin Wheatley, managing director of the U.K. Financial Services Authority, and Gary Gensler, chairman of the Commodity Futures Trading Commission, have been chosen to oversee a task force set up by the International Organization of Securities Commissions to investigate the London Interbank Offered Rate and other rate benchmarks. "IOSCO is committed to taking necessary steps to prevent the manipulation of benchmarks and restore confidence in the use of those benchmarks in global financial markets," the group said.

The International Swaps and Derivatives Association and the Association for Financial Markets in Europe wrote to the International Organization of Securities Commissions warning that efforts to crack down on high-frequency trading must be guided by "valid and un-conflicted evidence." The groups called for more research on the trading strategy. "Whilst it is the case that trading volumes have increased and spreads have declined, questions do remain as to a wider array of other impacts. ... We consider that further research is therefore required to examine the total impact of high frequency trading," AFME and ISDA wrote.

Hans Hoogervorst, chairman of the International Organisation of Securities Commissions' technical committee, said trading over-the-counter derivatives through a platform would increase transparency, competition and supervision of the market. "IOSCO believes that it is appropriate to trade standardised derivatives contracts with a suitable degree of liquidity on organised platforms, provided that a flexible approach encompassing a range of entities that would qualify as such platforms is taken by regulators," Hoogervorst said.